WiMAXimum Exposure

A New Type of Broadband Wireless Gathers Momentum

Worldwide Interoperability for Microwave Access — aka WiMAX — is a non-line-of-sight, point-to-multipoint broadband wireless access (BWA) technology. A potential competitor to DSL and cable for last-mile access and a strong backhaul option for cellular, Wi-Fi and enterprise deployments, it brings a novel concept to the BWA market that has analysts giddy: Scale.

At the moment, BWA vendors rely on proprietary, custom-built chipsets, which have kept equipment costs high and customers away. WiMAX, on the other hand, is standardized to the 802.16 specification. With standardization comes the ability to mass-produce products, so research and development costs decline along with manufacturing expenses. This could pave the way for lower-cost services, which WiMAX proponents say will make BWA feasible for mass deployment.

“RF components, power amps, radios, antennae — this is where volume economics come into play,” explains Margaret LaBrecque, marketing manager at Intel.

In-Stat/MDR forecasts the BWA market will grow from $558.7 million last year to more than $1.2 billion by the end of 2007, thanks to WiMAX. “The need for and interest in [fixed wireless broadband] is already there,” says Daryl Schoolar, a senior analyst with Instat/MDR. “These emerging standards will merely give this market the extra boost that it has needed.”

But WiMAX today is more theory than reality. The industry has yet to make available products or even chipsets based on WiMAX. However, a group called The WiMAX Forum, a collection of vendors and service providers, is working to drive the technology forward.

The WiMAX Forum plans to establish “rigorous definitions for testing and certifying products for interoperability compliance,” along with specs for minimum air-interface performance between products, fewer product variants and larger component series. By December, “WiMAX Certified” seals of approval will start to appear on equipment and components.

Meanwhile, Redline Communications Inc. offers an “802.16-compatible” product, and WiMAX chipsets are expected later this year.

Leading the charge is Intel, which wants to integrate 802.16 into its Centrino mobile technology, hoping to bootstrap the market. The silicon giant plans to roll out its first WiMAXcertified chipset based on the 802.16d standard for outdoor fixed-antenna installations this fall, followed by indoor install solutions in the second half of 2005, and chipsets based on the upcoming 802.16e mobility standard in 2006. Intel is working with turnkey equipment vendors Airspan Networks, Alvarion, Aperto Networks and Redline, and may strike deals with integrators like Siemens Mobile to help with deployment.

Speaking at January’s WCA conference, Sean Maloney, executive vice president and general manager of Intel Communications Group, likens wireless broadband to the Internet market circa 1994.

“Big things are going to happen in the next few years,” Maloney says. “Broadband wireless will produce a new wave of corporate innovation and restructuring.”

As for applications, the technology does have the chops to go the distance. The 802.16a standard, which covers the 2GHz to 11GHz bands for wireless MANs, provides up to 31 miles of linear service area range and provides shared data rates up to 70mbps. That’s enough bandwidth to simultaneously support more than 60 businesses with T1-type connectivity, and hundreds of homes with DSL-type connectivity using a single sector of a base station, with little to no rain fade.

Most WiMAX proponents see Wi-Fi, 3G and WiMAX as coexisting.

“The sweet spot is portable Internet, not highspeed mobile,” says Hendrik Prins, consultant for network planning and development at Unwired Australia Pty. “We don’t want to be 3G operators, and we don’t need it to work in a motor vehicle going 60 miles per hour. This is room-to-room, so you can position it where you want it. This is nomadic — self-install, user-friendly.”

Sheldon Fisher, vice president at Sprint Broadband Wireless, adds, “Long-range Wi-Fi has complications. With 802.11 you just can’t get to the same large cell size. So we’ll have Wi-Fi in the WAN and WiMAX in the MAN.”

The WiMAX Forum wants to streamline the technical side for operators.“We want to reuse the existing infrastructure so service providers can leverage 3G, 802.11 for interoperability and roaming,” says LaBrecque.

If standardization allows WiMAX to deliver cheaper last-mile connectivity than cable and DSL, Maloney says equipment vendors and service providers will flock to WiMAX, and not just as a solution for underserved “DSL refugees” and rural markets. The cost economics make sense where fiber is an expensive proposition, such as San Francisco, where it costs about $300 per square foot, he says.

“We will have multiple technologies coexisting — EV-DO in the rural areas, WiMAX in the cities and Wi-Fi in the home,” says Maloney. “The idea is to have optimal connectivity in the optimal medium wherever you are.”

One challenge is the ability to deliver a wellpriced product to end users. “Cable and DSL economics are that the average user gets 1,500 to 2,000 megabytes per month at 500kbps speed for $50,” explains Fisher. “That works out to a $.025 per megabyte yield — for example, 20 e-mails would be around 3 cents.”

WiMAX, he says, shifts the cost curve of mobile data to compete on a cost-per-megabyte level with cable and DSL, but the technical bugs will make deployment difficult in the beginning.

“You need reduced cost with performance that the market will accept, but disruptive technologies require tradeoffs to achieve cost targets — and start outside the range of market acceptability,” says Fisher.

Jon Hambidge, senior director of marketing at 3G provider IPWireless Inc., adds that some carriers are extra cautious about new technologies like WiMAX given that many operators have failed in the past with fixed wireless business models.

Even so, some service providers are listening to the WiMAX message. In a January interview with The Wall Street Journal, Qwest Communications International Inc.’s CEO Richard Notebaert says he thinks the economics of FTTP don’t work, but telcos may be able to compete with cablecos by using WiMAX.

Meanwhile, Jeff Thompson, president and CEO of regional wireless ISP (WISP) TowerStream, says he is preparing his network for a WiMAX overlay. AT&T has joined The WiMAX Forum. And Ron Marquardt, technical director at Covad Communications Group Inc., says his company is looking for ways to extend the copper plant economically and WiMAX is very much a possibility.

Another issue for WiMAX going forward is spectrum allocation. “Spectrum needs to be available for WiMAX to be successful,” says Aditya Agrawal, senior market manager for Fujitsu Microelectronics. “The goals are to obtain globally harmonized spectrum, enable carriers to deploy in licensed spectrum, enable organic growth with WISPs, target spectrum in lower frequency bands, and add certification profiles for 2.5, 3.5, 5.8GHz and other new bands as needed.”

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